Wednesday, November 17, 2010

Juicy Tuesday

Guys, what a nice day for volume bugs!
We could easily forecast the upcoming bear and successfully avoided to loose our gains.
So we had nothing to do just sit back and enjoy the show!

1-Day RUA:

Nice day down with a pathetic selling volume. This all thing seems a manipulated correction with nice opportunity for smarts to make Christmas dip-buy shopping.
Market is still unsafe, but we have 4 down days in the last 6 days and still selling volume pathetically touched the critical level. These are signals should be understood: probability is high, there is some nice upside change is preparing.
Of course, these days can't be forgotten easily. Now we need to wait few more days to relax the market, also this level will be tested once or twice. I feel no panic at all, and more test-bounce done, we can be more confident about the main trend.

Let's make some RUA 2-days analysis to see the larger picture:

Bearish cycle had enough power to drag selling volume up from steady zero.
I am just wondering will FED let smarts to push market lower or they will say enough is enough, and start their printing machines again.

2-days fakeout analysis:

We can observe, fakeout analysis is negative so far. After six days of bear long oscillator is almost intact.
With close monitoring we can identify if things run out of control.

USD 1 day:

It's very clear what was the engine of the last bull cycle: weakening dollar. As it is strengthening, market has no steam. FED has to do something to stop it: inflate. And that will be our friend: one of the reason I bough PM is this FED-trap. Please observe the weakening histo bull signal. It does not mean that dollar bull is over, rather we can see a buy-spike volume. It means surge is weakening.

Let me show you why did I buy gold and silver:

HUI 2-days:

Gold miners made it's second cascade down. It kept extremely well so far, and, I must say smarts could successfully manipulate this sector in order to let them climb-in. As PM is a small sector I expect 3 or for more squiggles in the next 8-12 days. These are 5-7% cycles, where 1 cycle lasts about 3-5 days up and 2-4 days down with a slight downtrend. When everybody is freaked out, they have a nice portion in their laps and then they start to dance.

You can see a scary downturn in histo, but please observe how strong bull is the oscillator after this, last selling cascade. Also please observe: after more than 10% of fall in prices selling volume is still steady zero on 2-days chart. Heck! Imagine the same in stock markets. I feel some truly amazing thing start to unfold in PM sector.
I will practice dip buy with smarts in the same rhythm as they are doing. They buy, I buy. It's all!

Anyway in order to protect ou wealth we need to be disciplined. Please find soft and hard liquidation levels below:


Oh yess... my beloved silver. As I told you in one of my earlier posts, silver runs if:
-Gold is up
-Dollars is down
If one of the conditions is missing, then silver struggles.
Heck, yesterday Market suffered a drop, gold fell like a stone, dollar made a nice gain and silver, in spite of an expected mega-drop, made a minor correction.
Again, something really surprising is preparing with PM sector, especially with Silver.
It will squiggle with more volatility than gold, but finally I expect a hyperbolic growth.
I will practice gradual buying of SIL. I plan to buy 6 SIL and 6 HUI and max 2 spx in this turn.


In order to protect our wealth we need to be disciplined. Please find soft and hard liquidation levels below:

And finally let me show you the 1-min RUA chart of yesterday.

I was shorting energy sector in the last couple of days as oil was dropping, but energy stocks remained almost intact and it was evident market will fall, also in order to prepare upcoming bull cycle of market it was necessary to have some correction in energy sector, before the big rally starts.

It was a real pleasure to follow the day and nicely get out and close short positions, also make a nice dip-buy in PM.

So it was a nice day me to see the violent price manifestation yesterday and I'd like to share the 1-min chart of RUA. Again, you can see how cool is volume based TA: yesterday I was out of my shorts at 12:58 AM and you will see now why:

Normally a down day should have strong selling volumes in 1-min chart with violent price effects.
What you can see is only few selling spike and then a pathetic, relaxed day. I would not take this all correction cycle too serious.

I feel we have everything we need for the next days: see the squiggles, make nice dip-buys, and if something big fall comes, we have our mental and hard liquidation limits.

So let's sit back and enjoy the show!

Good luck!

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